Having Small Business Finance Trouble? These 5 Tips Will Keep You on Track

Most new year’s resolutions are long forgotten by now. But there’s still time to make sure you’re starting 2024 off on the right financial foot. What you do now can have a real impact on your business’s financial outlook — and taxes.

Fortunately, there are easy ways to protect your business and ensure that Future You doesn’t want to slap Current You upside the head. Here’s what Current You should know.

Business and financial jargon

First thing’s first: Know the vocab. It’s hard to get the information you need when you don’t know the terms involved. KCSourceLink’s Startup Terms Every Entrepreneur Needs to Know and Financial Jargon Every Entrepreneur and Small Business Needs to Know will help you make informed decisions about your business’s financial health.

Record keeping best practices

As an entrepreneur, it’s your responsibility to retain documents to support your financial decisions. You can throw everything in a giant box and hope for the best. Or you can use a process that helps you prepare financial statements, study your cash flow, complete accurate tax returns and make informed decisions about your business.

Our Record Keeping Guide will help you organize everything from the cost of assets to cash register tapes. And don’t think that your business is too small to need a record-keeping system. Tracking expenditures like travel and supplies can save you big come tax time.

W-2, 1099-NEC and documentation for your workers

When other people work for you, there’s more paperwork for you. States and local agencies have different regulations, but you’ll definitely need an employee identification number (EIN), workers’ compensation insurance and a system for keeping employment tax records for at least four years.

Employers are required to report employee wages on Form W-2 each January. However, many small businesses have non-employee contractors. While these workers don’t receive a W-2, you are required to provide a Form 1099-NEC to anyone you paid $600 or more in the calendar year. Until 2023, these payments were covered by Form 1099-MISC.

A simple human resources program can make hiring and personnel record keeping a breeze. Here’s how to get started.

Estimated taxes

If you are self-employed or have a small business, there’s a good chance you need to pay estimated taxes each quarter. The IRS says that sole proprietors, partners and S corporation shareholders need to make estimated payments if they expect to owe $1,000 or more when they file their taxes. For corporations, this number is just $500.

You’ll pay estimated taxes with Form 1040-ES. The form includes a handy worksheet that will help you determine your tax payments. For a friendlier overview, check out our Guide to Estimated Tax for Your Small Business, courtesy of The Tax Institute at H&R Block.

Where to get help

Being an entrepreneur can feel like you have to figure everything out on your own. But the good news is that Kansas City is filled with people and programs to help you set up and grow your business. And that includes all things finance.

KCSourceLink is a great first stop for the help you need. Start with some of our recent posts:

• 7 Steps to Prep Your Small Business or Side Hustle for the New Year
• Legal and Accounting Tips New Business Owners Wished They Knew Sooner
• KCSourceLink Guide to Start Your Business
• KCSourceLink Guide to Funding Your Business
• How to Hire Your First (or Next) Employee: Follow These 7 Steps, Even in Tough Market
• KCSourceLink Guide to Hiring and Retaining the Right Employees
• How to Hire Your First Employee: A Checklist

Next, check out the KCSourceLink Calendar for a comprehensive list of local events and classes. You can even filter by topic and find sessions that meet your specific needs. Our Resource Navigator lists more than 230 KC-area organizations that provide free or low-cost guidance.

And if you don’t even know where to start? Start with a KCSourceLink Network Navigator. Provide a little information about yourself and your goals, and we’ll create a Personal Action Plan just for you. This custom to-do list will introduce you to local resources and experts, provide next steps and get you on your way. Plus? It’s free!